Should I buy out my car??

[NL__Fool]

So, my 3 year car lease ends in 2 months and I need to make a decision, Do I buy the car out with cash up front or just pay cash for a new one?

I am currently driving a 2005 Pontiac G6 and at the end of the lease it will have 50,000 KM on it (I live in Canada or 31,050 Miles)

The buyout on my car 1s $12,700 + tax which = $14,478.00 The buyout is non negotiable as I already tried. The car has never had a problem in the 3 years we had it and it runs great.

The Black book (our version of the US blue book) says the car is worth between $11,500-$13,700

The 2006 models,with identical options to mine with similair KM driven are selling for about $16-$17K in the dealerships I checked out.

My other option is to purchase a 2007 or 2008 Honda Fit LX, this will cost me $22,234.70 with taxes, delivery, etc.
I will recieve a $1000 rebate from the goverment about 6 weeks later because the fit is a fuel efficient vehicle which effectivly brings the price down to $21,234.00,(This is the best price I could get after checking out 5 different dealerships)

However if I turn in the G6 I estimate about $500 will need to be paid to the dealership for " excessive wear and tear" on the vehicle. Pop stains etc, a couple of scratches and dents that I wil get charged for. Nothing major but they are there

(My wife and I have test driven a lot of cars and we have decided on the Honda Fit)

Which is the better option and why?

Option A: Buy the 2005 G6 for $14,478.00.

Pro's- The G6 will cost me $6,800 Less, car has never had any problems, Insurance is about $10 year cheaper, Don't have to pay the dealership any excessive wear fees)
It's a bigger more expensive looking car with a few more features like power sunroof, V6 Engine, Driver Power seat (nothing I can't live without however)

Con's- I will have no warranty and any future repairs I will need to pay for. It has 50,000 Km on it and I have no idea how long a car should last these days. It has a V6 engine compared to the Hondas 4 cylinder so it is worse in gas by about 8-10 MPG, A couple minor dents and scratches and the abckseat has some stains on it that wont come out

Option B: Buy the Honda Fit

Pro's- It's a New Car, inside is immaculate I have a full 3 year/60km Warranty
It's better on Gas, Hondas should last a long long time

Con's- It's $6,800 more then the G6, plus $500 needs to be paid to the delaership fo wear and tear on the G6

I work from home and expect to put about another 50K on either car in the next 3-4 years.

[MrWookie]

When you buy out a car, you automatically lose the warranty? Or did it only have a 2-3 year warranty to begin with? Either way, that seems kinda crappy.

[NL__Fool]

Standard warranty is 3 years/60K in Canada unless you want to pay extra. Powertrain is 5 years/100K

3 years will be up in 2 months so it will be gone then.

Standard for cars Canada

[RickAstleyFan]

I have worked in that biz before, get rid of the lease. Let it go and get the new one and make your wife happy.

[NL__Fool]

[ QUOTE ]
have worked in that biz before, get rid of the lease. Let it go and get the new one and make your wife happy.

[/ QUOTE ]

Why is that? Is the car expected to have major problems down the road? What is the life expectancy these days of a car?

I wouldnt be releasing the car I would just pay cash and own it. No more leasing for me

[ChuckyB]

$7,000 extra is too much to pay just to have a warranty. When you think about the repairs you could have done for $7K...it's remarkable.

Plus, new cars are one of the worst purchases you could possibly make. It's like burning money.

I'd say keep the Pontiac if it's been good to you. Or give it back and find a slighty used Honda/Toyota/Hyundai.


BTW: My 2006 Hyundai Elantra (bought used at 1 year old, 28,000 km...$13,400) came with the remainder of a 5/100 warranty. Pontiac's 3/60 sounds like it sucks.

[NL__Fool]

[ QUOTE ]
7,000 extra is too much to pay just to have a warranty. When you think about the repairs you could have done for $7K...it's remarkable.

[/ QUOTE ]

See thats the thing, I've always leased and never owned because I've always been able to write them off. So I have no idea how much I should expect to spend in repairs in the next 3-4 years.

Also is their any way to determine how much a car is worth in 7 years? How much do they depreicate?

[RickAstleyFan]

The best play is to always make the woman happy, even if it costs more.

So that aside and looking only at logic, The car is due to take a major nosedive in price over the next year or three.

The most sensible thing is yes, to drop it off, and use your cash to buy a used toyota, honda or Mitsibishi, something reliable with a good hold on it's value.

Good luck!

[ChuckyB]

[ QUOTE ]
So that aside and looking only at logic, The car is due to take a major nosedive in price over the next year or three.

[/ QUOTE ]

If this is about the Pontiac that he currently leases...I'm not sure what you're talking about. A car loses most of it value in the first four, taking a major hit in first few seconds.

[NT!]

jesus i would never buy out your car, but then again i would never have leased it in the first place